Manufacturing Output (Hansard, 4 December 1990)

§ The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde)
My Lords, manufacturing output data at constant prices are 99 published in index form with the average for 1985 equal to 100. In the first three quarters of 1990 the index took the values 119.9, 121 and 118.9 respectively.

§ Lord Hatch of Lusby
My Lords, I regret that the noble Lord, Lord Hesketh, is not answering the Question. Is the Minister aware that on 14th November, on the same subject, the noble Lord, Lord Hesketh, said that, we now have an economy which, in the third quarter of 1990, has manufacturing output at a record level"?—[Official Report, 14/11/90; col. 327.] Do not the figures given by the noble Lord contradict that assertion? When I challenged the noble Lord, Lord Hesketh, he promised to write to me if his figures were incorrect. I have received no such letter. Will the noble Lord now admit on behalf of the Government that the statement of his noble friend was incorrect?

§ Lord Strathclyde
My Lords, if the noble Lord had read further to col. 426, he would have found that my noble friend Lord Hesketh made an apology to the House.

§ Lord Brougham and Vaux
My Lords, can the noble Lord tell the House how our output growth compared with that of our European partners in the 1980s?

§ Lord Strathclyde
My Lords, I am glad to say that in the 1980s, the annual rate of growth was the second highest of our European partners.

§ Lord Denham
My Lords—

§ Lord Stoddart of Swindon
My Lords, the Chief Whip is sharp on his feet today! Has the noble Lord seen the figures issued today showing that company liquidity has fallen considerably? Does that not bode ill for the manufacturing investment that is so vital to our manufacturing component which must increase if we are to be successful? Will the noble Lord now agree that it was sheer stupidity, bearing in mind the decline in manufacturing output, to enter the ERM at the high level of 2.95?

§ Lord Strathclyde
My Lords, there has been a long term decline in the manufacturing share of output since the 1950s. Investment has increased by 11.3 per cent. since 1979. No, I do not believe we joined the ERM at the wrong time.

§ Lord Stoddart of Swindon
My Lords, the noble Lord suggests that I said we joined the ERM at the wrong time. As a matter of fact we should not have joined at all. What I said was that we joined it at the wrong level of 2.95.

§ Lord Strathclyde
My Lords, I do not believe that we joined at the wrong level either.

§ Lord Peston
My Lords, I shall certainly not engage in a debate on the ERM; I shall stick to manufacturing output. I am still attempting to discover what the Government's position is. Am I right that manufacturing output has been stagnant since the beginning of 1989? Without labouring the point excessively, under this Government for the first time in British history we have reached a deficit on manufacturing trade account in the balance of payments. Can the Minister say 100 whether the Government regard that as a satisfactory state of affairs? It sounded as though the Minister felt that the decline in British manufacturing industry was wholly acceptable. Or do the Government, like the rest of us, view the situation as alarming and a matter about which something should be done?

§ Lord Strathclyde
My Lords, manufacturing industry is now exporting more than in 1973. We had record manufacturing output during the 1980s; under the Labour Government it actually fell by 2.5 per cent. It is not a matter of whether or not we are satisfied with the current level. We are saying that that must be for the manufacturers and the consumers to decide.

§ Lord Peston
My Lords, the noble Lord must be explicit. The present position on overseas account—

Noble Lords
Question!

§ Lord Peston
I shall get to the question. I thought the noble Lord would like to understand the subject before I reach the question. I was trying to be helpful. It is unfair to the Minister to ask him a question when he does not know what we are talking about. Is he aware of the fact that we are in a very serious position both externally and internally? He simply needs to tell us whether the Government regard that as satisfactory. Is the present position a good one in the Government's view, or one about which the Government feel something should be done?

§ Lord Strathclyde
My Lords, I fully understand the subject about which the noble Lord speaks. The Government believe in managing the economy in such a way as to allow businesses to make up their own minds as to where they want to go.

§ Lord Hatch of Lusby
My Lords—

§ Lord Denham
My Lords, we have already spent six minutes on this Question. I carefully paused before rising. I miscalculated the first time, for which I apologise to your Lordships. It is now the time when the House would probably appreciate hearing the business statement.

Noble Lords
Order!

§ Lord Hatch of Lusby
My Lords, I simply point out that I was on my feet to ask a further supplementary question as soon as the noble Lord on the Front Bench answered my first question. I have been on my feet each time when there has been a pause. As I asked the original Question I ask the House to allow me to ask the final question.

§ Lord Denham
My Lords, I am sure that the House will allow the noble Lord to ask a final question. After it has been answered perhaps we can move on.

§ Lord Hatch of Lusby
My Lords, I am greatly obliged to the Chief Whip. May I ask the noble Lord, Lord Strathclyde, who has answered on behalf of the noble Lord, Lord Hesketh, whether the noble Lord, Lord Hesketh, made inquiries as to how he was briefed to make the statement that he did to the House. If it is the case that the Department of Trade and Industry is giving Ministers false information, that suggests that the whole of government policy is based on a set of false assumptions.

§ Lord Strathclyde
My Lords, that is a nice point to make; it does not happen to be the case. I refer the noble Lord once again to the words of my noble friend Lord Hesketh which are to be found at col. 426 on the fifth day of the debate on the Address.